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The head of the International Monetary Fund (IMF), Christine Lagarde, said that regulators should use blockchain technology to curb the "danger that comes with the promise" of cryptocurrencies.
"The same innovations that feed crypto-assets can also help us to regulate them." To put it another way, we can fight fire with fire, "wrote Lagarde in an IMF blog post on Tuesday.
Lagarde warned that cryptocurrencies could create financial instability, as well as facilitate terrorism and money laundering, arguing that distributed register technology and cryptography could be used in internationally coordinated regulatory efforts.
Generalized accounting technology, he said, "can be used to accelerate information sharing between market participants and regulators".
Lagarde wrote:
"Those who have a common interest in maintaining secure online transactions need to be able to communicate seamlessly.The technology that enables instant global transactions could be used to create standard, verified, customer information logs along with digital signatures. data from governments can also help free up resources for priority needs and reduce tax evasion, including the evasion of cross-border transactions. "
In the post, Lagarde also said that cryptography, in addition to AI and biometrics, could be used to "remove" pollution from the "crypto-goods ecosystem".
According to Lagarde, these technologies "can improve digital security and identify suspicious transactions in real time, which would give the ordering forces an advantage in acting quickly to stop illegal transactions."
The IMF managing director has continued to suggest that regulators should look to the Financial Action Group (FATF) executives and the Financial Stability Board to inform their rules.
The opinions expressed in the blog post are broadly in line with Lagarde's earlier comments on cryptocurrencies, although literally burning rhetoric may indicate that the IMF is seriously engaging in the cryptography industry first rather than later.
Image of Christine Lagarde through Shutterstock
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